Accounting for Externalities > English > Training and social externalities

Homo sapiens would have been one of the first men to use articulated language. But whatever the hypothesis (productivist or sociological), language, and transmission, has been the vector, towards technique, and the development of thought.
Nowadays, this transmission of knowledge is organized thanks to a regalian function (education), but also through practical learning, made possible by the diffusion of a common base during childhood. To ensure this educational function, we agree to pay taxes, which will be used to train the new generations. The learning (putting into practice), is all the more accelerated and thus allows companies to have a productive tool quickly (a tool that took millions of years of learning to reach the current level). Economically, the question is therefore to maintain a level or even improve it thanks to the regalian function of education.

Companies can also participate in this effort, if it is in their economic interest. This generates a positive externality, and thus increases the overall level of competence of the company. Let’s see how we can calculate the resulting externality.

In most developed countries, training is an expense borne by the State (a regalian expense), which is financed by the taxes it collects. These taxes collected come from economic activity, supported by brain juice, well constructed, and thus feed a self-sustaining system. As always in economics, the practice consists of setting up virtuous (flow, not always monetary) and balanced circles.
Two consequences:

  • Education, supported by the state, supports the economy:
    • the taxes paid by economic agents are partly used to create the brains to run an economic activity,
    • companies are indirectly using a public resource that has helped transform empty-brained primates into ingenious and creative white-collar workers,
  • Education and skills are a resource that is valued but does not belong to anyone,

The educational contribution (training) of a company therefore corresponds to a social benefit. Each training financed by a company is a positive externality for society.

It only remains to qualify the type of training offered.
Indeed, training must be “universal” and transposable so that it can have a potential impact on society, and thus generate an externality.
For example, training on the company’s internal processes is not a priori transposable to other companies, and therefore the cost of training cannot be counted as a positive externality.
A training course leading to a diploma can be considered as a positive externality as soon as the employee who took the training is free to leave. It is therefore also necessary to take into account possible retention clauses, which may delay the recognition of the positive externality.

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